The Environmental Kuznets Curve in Small Geographies

Aurelie Slechten

The Environmental Kuznets Curve in Small Geographies

Abstract

We consider the relationship between location choices of polluting industries and local incomes. Working at the census tract-level, we find these choices are positively correlated with local income over lower income levels and these firms' demands for measures to reduce the likelihood of toxic release, as proxied by waste management firms, show a similar pattern. We find evidence the relative frequency of toxic release is negatively correlated with proximate incomes. We conclude that the Environmental Kuznets Curve is related to profit maximizing behavior of firms seeking to maximize expected profits in recognition of the financial risk associated with toxic release.